Paying for things online has been around since the internet has been around but it’s only during this pandemic that the true importance of paying digitally was brought to the forefront, now, of course, it did have a surge in popularity since Bitcoin and other cryptocurrencies became a thing but that’s another discussion for another time. Since the majority of businesses have been forced to close, it has gotten difficult to obtain goods, not to mention at the start of the nationwide lockdowns private and public transportation has been suspended save for crucial services like food and grocery deliveries.
Since cashless methods of payment are becoming popular, what are the things that we, the people, should be aware of? What are the pros and cons? Here we have listed a few worth noting.
Let’s look at the disadvantages first.
1. Delays in Updates. While you will not be lining up in queues at the grocery, there are certain transactions that need additional processing that can take anywhere from a few minutes to several days. The delay is increased if it’s a weekend or a holiday. So, you could have paid faster if you just lined up in the grocery in some cases. Although rare, it’s still a nuisance if this happens.
2. System Errors. System errors are a thing and will always be a part of the software. When a company updates its software that manages these financial transactions, unforeseen glitches can happen and make things worse instead of making things better. Depending on how secure the system is, a computer virus can also cause problems, or the effects of unpatched bugs that had existed in the software’s source code for years may start to manifest.
3. Theft Is Still A Thing. If there’s money, there are going to be thieves. We mentioned earlier that portability is a pro but it’s also a pro for a pro thief. If they manage to steal your phone or credit card then you better work fast and contact your bank and inform them. The old adage: “Don’t put all your eggs in one basket.” is a strong reminder that we should not rely on technology to centralize all our financial needs. At least with physical cash, the thief might steal what you have in your pocket at the moment but at least you still have the majority of it in the bank unless what you have in your pocket is literally all the cash you have then you’re out of luck.
4. Natural Disasters. When the typhoon Ulysses (Vamco) struck the Philippines just a few days ago, the power went out and cellphones don’t have the power to stay on for long several days. Internet connections can become unstable or nonexistent at all. Even if the banks and their servers have power, if the people themselves don’t have any then no transactions can happen. Do you need medicine or you need to get a loan? Unfortunately, that’s not going to happen if there is no electricity or no means to communicate with the rest of the world.
Now let’s talk about the benefits
1. Saves Time on Financial Transactions. The biggest advantage of doing things electronically is the speed. When it comes to buying or selling things this way, people don’t have to line up in queues, and prices are paid accurately down to the cents so there’s no need to wait for your change unlike when paying with physical cash.
2. Social Distancing. Since social distancing is one of the minimum health protocols, paying for things at the comfort of your own home is probably the best way to practice social distance. In this way, you can’t contract the COVID-19 virus unless it’s a computer virus you get instead.
3. Minimal to No Exchange Rate Fees. Depending on the source and destination of a cash transfer, some additional fees may be charged on top of the principal amount, especially if it’s coming from overseas. Despite this, it’s still not as high as what one would get at an airport currency exchange.
4. You Can Access Your Account Any Time. If your financial transactions are recorded on a ledger, you can easily monitor how much you spend at any given time. This is not something you can do automatically with physical cash. Today, you don’t even have to physically visit the bank specifically if the bank has its own app or website on which you can login to check your finances.
5. Security and Accountability. Since a financial institution keeps records of its clients’ financial transactions if someone questions your spending like let’s say in a court case, at least you can show the courts a financial record that has some degree of authority unlike if you made the list yourself or have your personal accountant do it. The latter instances can still be put into question. Also if a thief steals your credit card or somehow manages to log in to the app to your bank account and somehow got your pin, if they try to spend it with your money, there’s a high possibility of performing a trace.
6. Portability. Wallets and physical cash in your pockets might no longer be a thing as all your cash is stored offsite.
7. Loaning Cash Is A Lot More Convenient. In times of emergency, especially with the lockdowns the current pandemic is causing, many of us can run into trouble with our finances. Many people lost their jobs or jobs are on a hiatus at the moment so naturally, people won’t be able to buy or sell products and services.
Unless the government hands out a stimulus package from the government and alternative sources of cash will have to be sourced. One of the quickest and most obvious sources would be through a lowest interest personal loan. But banks can be stringent when it comes to their requirements as they require to go through all your credit history if you have any.
In the Philippines, the majority of Filipinos don’t have a bank account. According to the latest survey in 2019 of BSP, only 29% of Filipinos have bank accounts. The number could increase over time because of the pandemic but that’s going to be a long wait. Regardless, alternative sources for loans are going to be needed. In comes services like Robocash. It is a lending company that lends loans and should be used in the most extreme of emergencies. Payments will also have to be repaid on or before the deadline.
The requirements for applying for a loan are very simple and are easy to come by like 2 government-issued Ids, the applicant must be a Filipino citizen, no younger than 21, and must not be 70 by the time the loan term ends. If the applicant is a retiree, an alternate source of income is required outside of a monthly pension. You can read up more about their services from their FAQ page at Robocash official site.
So, these are a few things to consider if you are trying to weigh your options. Will you go pure cashless, stay physical, or a mix of both?